March 17 (Bloomberg) -- Allot Communications Ltd. advanced
as prospects rising demand for wireless services will spur
record revenue lured investors to the Israeli technology company
trading 35 percent below its average valuation over the past
year.

The shares gained as much as 1.5 percent in Tel Aviv today.
They rallied 9.8 percent in the five days to March 15 in New
York, capping Allot’s biggest advance since August and the best
performance on the Bloomberg Israel-US Equity Index of the
largest Israeli companies listed in the U.S. The gauge fell 0.6
percent March 15 and the shekel ended the day 0.3 percent
stronger versus the dollar as Prime Minister Benjamin Netanyahu
signed coalition deals to form a new government following
January elections.

Allot, which makes products used by telecommunications
companies to track wireless traffic, trades at 20.4 times
estimated earnings in the U.S., compared with an average
valuation of 31.3 over the past year, according to data compiled
by Bloomberg. A doubling in global mobile data traffic last year
burnished the company’s outlook, according to Northland
Securities Inc., and Allot will post record sales of $124
million this year, the mean of 10 analysts’ estimates shows.

“The stock has been very beat up,” Alex Henderson, an
analyst at Needham & Co. in New York who has rated Allot a buy
since initiating coverage in November, said by phone March 14.
“The company sells into a category that’s one of the hottest in
telecom. There’s certainly some value investors and growth-at-a-reasonable-price investors nibbling at it.”

Allot Shares

Allot shares, which closed unchanged at $14.42 in New York
March 15, gained 8.3 percent in Tel Aviv last week. They rose
0.6 percent today to close at 52.88 shekels.

The company stands to gain as wireless carriers increase
spending on services to help manage traffic, according to
Needham’s Henderson. Telecommunications infrastructure spending
was up 4 percent in 2012 and will grow this year, according to a
December report by Infonetics Research, a Campbell, California-based research firm.

Netanyahu’s Likud party signed coalition deals with two
other factions March 15 that will enable him to form a new
government. The new alliance, comprised of Likud, Yisrael
Beitenu, Yesh Atid and Hatenuah, will hold 68 seats in Israel’s
120-member parliament, the Knesset. The coalition’s makeup
should enable the government to make the budget cuts necessary
to keep spending in check, after last year’s deficit came in
above target.

“The commitment to free-market reforms is strong,” Steven
Schoenfeld, the New York-based founder of BlueStar Global
Investors LLC, said in a phone interview March 15. “There’s a
strong consensus centered on fiscal deficit. The broad economic
reforms are pretty much baked in.”

MagicJack VocalTec Ltd., which provides voice-over-Internet
services, tumbled 13 percent to $12.91 in New York last week,
the biggest weekly retreat in two months.